Apple to DOJ: We’re Breaking Amazon’s Monopoly

The U.S. Department of Justice filed an antitrust lawsuit against Apple and several book publishers earlier this week alleging they collaborated to artificially set the price of ebooks. Now Apple has fired back with a statement saying it has actually been working to break Amazon’s control over the ebook market.

The DOJ’s accusation of collusion against Apple is simply not true. The launch of the iBookstore in 2010 fostered innovation and competition, breaking Amazon’s monopolistic grip on the publishing industry. Since then customers have benefited from eBooks that are more interactive and engaging. Just as we’ve allowed developers to set prices on the App Store, publishers set prices on the iBookstore.

After conducting an investigation into whether or not Apple, along with Simon & Schuster, Harper Collins, Penguin, Hachette Group and Verlagsgruppe Georg von Holzbrinck collaborated to artificially drive up ebook prices, the government agency filed a lawsuit claiming the companies formed a “cabal” that ultimately left consumers paying more for ebooks than they otherwise would have.

Apple says it didn’t collaborate to artificially set ebook prices

“We’ve long held that Apple and this group of book publishers formed a cabal with the sole intent of extinguishing any competitive influences in the e-book marketplace,” said the Department of Justice’s lead counsel Steve Berman.

When Apple introduced its iBookstore, it agreed to what’s called an agency model for book pricing where publishers set how much consumers pay instead of letting retailers buy books and sell them at whatever price they like. Amazon resisted the change because it didn’t fit with its business model where it bought books at a percentage of the cover price and then often times would sell titles for below cost.

Following the announcement that the DOJ had filed its lawsuit, Hachette, HarperCollins, and Simon & Schuster all reached a settlement and were dropped from the lawsuit.

MacMillan CEO John Sargent said that the agency model fosters an “open and competitive market,” and added there was no collusion on the part of publishers to change the book pricing model.